It’s Friday the 13th, and Halloween appears to have come early this year in the form of a ghoulish CPI report published yesterday. Superstitious or not the markets were certainly spooked by news that the US inflation rate rose by 0.4% MoM (0.3% expected) and 3.7% YoY (3.6% expected), largely driven by rent, gas and energy costs. The news sent US indices hurtling to the downside with NASDAQ leading the charge, losing 85 points during Thursday’s session, down 0.63%. The S&P wasn’t far behind, losing 27 points and closing 0.62% in the red, and finally the Dow Jones Industrial Average bringing up the rear, down 0.51% on the day.
Completely different story for Asian markets, which continue to show strength this week, with the Nikkei finishing 1.75% in the black on Thursday. Determined not to be outdone by its Japanese counterpoint, Hong Kong’s Hang Seng gained 1.93% on the same day, now up for the sixth session in a row. The Shanghai Composite Index also rallied 0.9% during Thursday’s trading.
The response in the USD was a predictable one after the hotter than expected inflation data. The release from the Bureau of Labor Statistics triggered a surge in the Dollar, sending the DXY up 0.8% and the Euro in the opposite direction. Cable was down 1.11% and USDJPY closed the day tantalisingly close to the all-important 150 mark, coming in at 149.8.
Gold continued to make modest gains on Wednesday but once again ran out of steam the following day, spot price closing at $1868.8 on Thursday.
Retail sales are on the menu for next weeks economic calendar, with data releases from China, UK, US and Canada to look forward to.
